Even as

Time Warner

(TWX)

was busy paying $300 million to settle federal fraud charges stemming from its merger with America Online, the mergers-and-acquisitions bug was buzzing anew on Wall Street on Monday.

Barry Diller's plan to acquire Internet search engine

Ask Jeeves

(ASKJ)

through his

IAC/InterActiveCorp

(IACI)

, unveiled Monday, was the latest in a string of high- and low-profile consolidations in corporate America that have garnered riches for some investors but have yet to impress the broader market.

Other deals announced Monday included

Medicis Pharmaceutical

(MRX)

buying

Inamed

(IMCD)

for $2.8 billion;

Avid Technology

(AVID) - Get Report

buying rival

Pinnacle Systems

(PCLE)

for $462 million in cash and stock; and

Entegris

(ENTG) - Get Report

merging with

Mykrolis

(MYK)

in a stock swap, creating a semiconductor industry supplier with more than $650 million in annual sales.

After several years' slumber following the recession of 2001, dealmakers are partying like it's 1999. Blockbuster moves like

Verizon's

(VZ) - Get Report

acquisition of

MCI

(MCIP)

,

Kmart's

(KMRT)

acquisition of

Sears

(S) - Get Report

and

Procter & Gamble's

(PG) - Get Report

acquisition of

Gillette

(G) - Get Report

have ushered in a new era of boardroom shake-ups. This time around, however, the deals have done little but move the stocks involved.

"Traditionally, when M&A activity is on the rise like this, it's a good sign for the market," said Paul Mendelsohn, chief investment strategist with Windham Financial Services. "But this is such a bizarre market here in terms of the way it's been operating, mainly because of the steady rise in oil prices."

So far in 2005, despite all the activity, the

S&P 500

has shed 1.5%, and most market-watchers blame the decline on the price of crude, which posted a new all-time record high last week at $57.60 a barrel.

"As good as all the deal news is, it's completely overwhelmed by oil prices," said Hugh Johnson, chief investment officer with First Albany. "The rise in oil prices means that economists are wrong for raising their estimates for the economy and earnings in 2005 and 2006. The market's message is very clear -- they're wrong. Strategic acquisitions are not going to matter."

Such sentiment shows that today's boardroom drama is taking place against a starkly different backdrop than the one that fueled the ill-fated mergers of the 1990s. To be sure, each deal takes place under its own set of circumstances, and generalizing about them can be problematic. But the recent flurry appears to be driven more by a temporary window of opportunity than an overriding confidence in the economy.

After a period of tax breaks, low interest rates, corporate restructuring and nonexistent capital expenditure, companies are flush with cash. Combine that with swelled valuations after a two-year bull market, and executives are armed with both cash and stock that can be used to go deal-shopping.

Meanwhile, interest rates are still historically low, despite a series of quarter-point hikes instituted by a cautious

Federal Reserve

, and most investors agree they can't stay that way forever.

"I don't think these companies believe that interest rates are going to remain low, which means that the window of financing opportunities won't last," said Johnson. "I see that among companies and issuers of corporate debt and public finance debt. They'll tell you that they want to get through the door right now before it closes."

So, while consolidation is definitely the result of recent economic prosperity, it may not be motivated by a belief that such trends will continue in the future. In fact, if executives are motivated to act now while the sun is shining for fear of higher rates and lower stock values in the future, then the opposite is true.

But does that mean that today's mergers are destined for the same fate as their predecessors?

"I would hope that the companies that are doing the deals now are a little bit smarter and a little bit wiser, given the history of what has taken place," Mendelsohn said. "Certainly, with the corrections that have taken place in the stock market in the 2001 and 2002 period, it makes a lot of these deals look better. You have to take a lot of these deals on a one-on-one basis, and I hope we're not getting into the same situation we were in before."

Many investors have signed on to recent deals based on the prestige of the people behind them. For instance,

Berkshire Hathaway's

Warren Buffett signaled his approval of P&G's $57 billion bid for Gillette. The rich price tag for the razor maker must have pleased the legendary investor from Omaha, whose company owned a reported 96 million shares in it. But he said he plans to own 100 million P&G shares when the transaction closes, calling the buyout "a dream deal" that will "create the greatest consumer products company in the world."

Such rhetoric assured investors that Buffett remained optimistic about the combined company, but skeptics have said that's because P&G overpaid. While the deal was an immediate windfall for Gillette, it remains to be seen how much value its new parent can wring out of the combined company.

In the case of Kmart/Sears, investors have bid up both stocks rabidly, based largely on the track record of Ed Lampert of ESL Investments, an admirer of Buffett with a history of orchestrating impressive operational turnarounds at troubled retailers.

Diller also boasts an impressive track record.

"If he wants Ask Jeeves, there's got to be some logic behind what he's doing," said Mendelsohn. "In terms of some of the others, some look very positive and some are questionable. Look at the Verizon-MCI deal. You've really got to ask yourself, did the MCI shareholders get out of that what they should have? I think Verizon bought it very cheap, and when you look at putting those two companies together and what the future of the industry may look like, does it make sense? That's hard to say.

"While it's nice to see these deals getting done, I'm not sure it would project that optimism out into what the future of the market and the economy looks like," he added. "We're spitting into some headwinds here."